Transgenic methods offer a complementary approach for classical breeding to improve the tolerance of plants toward biotic and abiotic stresses. The objective of our study at RC Biotechnology LIPI in Indonesia, in collaboration with the Institute of Biology of Leiden University (The Netherlands), is to explore the use of HD-Zip transcription factors in improving the performance of rice under dry conditions. Enhancing drought resistance entails transgenic expression of HD-Zip transcription factors involved in drought response of rice. Earlier, seven HD-Zip I and II genes were identified in rice that were analyzed for drought-responsiveness. One of the two dehydration-repressed HD-Zip genes was induced by 4 hours of flooding, as a treatment opposite to drought. This Oshox4 gene from the HD-Zip gene family was selected for study in transgenic plants. Transgenic Nipponbare lines overexpressing this particular gene developed smaller leaves and exhibited a reduction in senescence compared with the controls. Transformation of Indonesian rice with Oshox4 and characterization of transgenic lines, including drought phenotyping, are now being carried out. Experiments carried out in Arabidopsis showed that overexpression of this particular HD-Zip gene can confer resistance to drought. Our second approach aims at identifying novel drought-resistance genes and is based on insertional mutagenesis in rice using gene trap and activation tag constructs.